At Silicon Valley Outpost, Carter Hears Pitches from Small Firms

SAN FRANCISCO — Secretary of Defense Ash Carter may not be a millionaire, but he got to play one Tuesday during a visit to the Pentagon's Defense Innovation Unit-Experimental (DIUX) outpost.

Carter attended a "Shark Tank" event, named after the ABC NBC show where investors can pitch funders on new products. , t The event saw five firms trying to sell their ideas directly to Carter.

It's the kind of situation that the head of the Defense Department would not traditionally find himself in, but Carter said it is the kind of event that makes DIUX so valuable for his outreach to the California tech sector.

"What you saw in this room were some people who have an interest in, a taste for the challenge of protecting our society and making a better world and making everything that's out here and throughout our country, you know, wonderful, innovative, country that it is, making all that possible and that's security," Carter said to reporters after the event concluded.

Although announced in April of 2015, DIUX did not open until Aug.ust 15 of last year. The group has met with "hundreds" of companies, according to a DoD factsheet.

DIUX has three full-time employees from the Office of the Secretary of Defense; four DIUX team members detailed on a short term basis; 12 personnel assigned by the Services; and two representatives from US Cyber Command (CYBERCOM.) Overall, five employees are government civilians and 16 are uniformed.

Joining Carter on the "Shark Tank" panel was Frank Kendall, the Pentagon's top acquisition official; Eric Rosenbach, Carter's chief of staff and a former cyber advisor for the department; and Chris Lynch, head of the Defense Digital Service group launched in November.

The five companies that pitched Carter were:

Qadium, which scans devices on the public Internet and compares the results against known vulnerabilities, misconfigurations and anomalous behavior. "This data allows an organization to footprint their own network devices and easily see existing vulnerabilities and misconfigurations that attackers could exploit," the DoD factsheet said.

Saildrone, which deploys wind-powered, unmanned, sailboats that can carry sensors for data gathering in environments where traditional, manned systems may not be able to access.

Quid, which does analysis of written texts to find patterns across documents. "Quid’s technology and machine augmented algorithms cut down analysis time through automated content curation and human-to-machine teaming," according to the DoD factsheet.

Bromium, a firm that provides "end-point protection through micro-virtualization," targeting each individual action that occurs on a technological device in order to isolate attacks.

Earlier in the day, Carter acknowledged that small firms such as these need the Pentagon to speed up its acquisition process if they are to succeed.

"We're never going to have the latitude a [venture capitalist] does, because it's the taxpayers money. And the taxpayer requires a level of transparency and fairness and everything that we have to provide," Carter said at an event hosted by the Commonwealth Club.

But, "that doesn't mean we can't be fast and we can't be agile, We're not going to keep up in a competitive world if it takes DoD two years to turn every circle, people are going to outrun us."

Although only part of the outreach from Carter to Silicon Valley, DIUX represents the Pentagon's only true permanent outpost in Valley. And hence, the unit has drawn criticism from those who feel the Pentagon should be doing a better job of collaborating with the tech sector.

Ben FitzGerald with the Center for a New American Security called it "very impressive in DoD terms" that the department was able to set up and staff DIUX in under a year, and acknowledged that it "has also attracted some great civilian and military talent."

At the same time, he says, the organization's purpose seems muddled, to the point where he sees "competing missions," and raised concerns that "it also does not seem that they have the right organizational and leadership support from the Pentagon beyond the obvious endorsement of the Secretary."

Pitching Products

Reporters were only allowed to sit into the first presentation to Carter, but it gave a flavor of the session.

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Sherban Naum, regional vice president for Bromium Federal, spent roughly ten minutes explaining his product to the Pentagon officials. Carter interrupted the presentation several times to weigh in or ask questions. In true "Shark Tank" fashion, the questions included some challenges to the setup for Naum's system and what capabilities Bromium brings that other programs don't.

After the event, Naum was enthusiastic about the process, and in particular the role DIUX played in setting up a conduit for small firms like his to get even a few minutes of Carter's time.

Asked if he felt DIUX was working well, he responded effusively with "Oh my goodness yes. Yes. Yes, absolutely."

Naum pointed out how in the 1970s, the line between the Valley and the DoD helped develop game changing technology like stealth and GPS,

"They knew they had to change the game to their benefit. DIUX is doing that. They are going to change the game not just for cyber security but for all these other problems," he said. "This reconnection between the two I going to bear a lot of fruit. This should have been done along time ago. This is fantastic."

He also specifically called out the staff at DIUX for having weekly meetings with his firm and maintaining a high level of engagement with companies in the Valley.

"It's very cool. It's very un-governmental," Naum said. "You expect it to be big bureaucracy. This is nimble, it's agile, and they actually do care."

Aaron Mehta is the Senior Pentagon Correspondent and Associate Editor for Defense News, covering policy, strategy and acquisition at the highest levels of the Department of Defense and its international partners.